Employers throughout Malaysia have raised concerns over their ability to find candidates with the skills essential to business growth in 2019. This is one of the key findings in the Hays Asia Salary Guide 2019, a report that highlights salary and recruiting trends based on responses from Hays Asia operating markets Mainland China, Hong Kong, Japan, Malaysia, and Singapore.

The report reveals that a total of 46 per cent of employers are not confident in locating talent with the skills they need to meet operational requirements in the year ahead. This number has grown from 35 per cent who expressed the same in 2018.

The impact of skills shortages

Amid the shaky confidence in securing skilled talents needed for further development, employers are also concerned about how skill shortages would hamper the effective operation of their businesses or departments in 2019. While 41 per cent of employers believe that operations will ‘without a doubt’ be affected, 53 per cent say that ‘there will be some impact’.

In addition, when asked about the areas in which skill shortages have had a negative impact on their organisation, employers cite that productivity (71 per cent), growth and expansion (52 per cent) and employee morale (46 per cent) were most impacted, in that order.

Skills types

According to the research, more companies in Malaysia are favouring hard skills (60 per cent) over soft skills (40 per cent) in candidates. While statistical analysis and data mining, project management, and computer skills are the most preferred hard skills, employers who prefer soft skills in candidates are on the lookout for aptitude in problem solving, team working and critical thinking.

“With talent shortages remaining a challenge to businesses in Malaysia, hiring managers have been placing a higher emphasis on hiring talents with technical skills over emotional or psychological competencies,” says Tom Osborne, Managing Director at Hays Malaysia.

“However, our latest Diversity and Inclusion report reveals that over three in five (65 per cent) respondents in Malaysia believe their leaders are biased towards employees who look, think and act as they do, which may be counter-effective in casting a wider recruitment net to reach adept, skilled talent. To address skills deficiencies, employers can truly stand to benefit from being more inclusive in their talent attraction and retention strategies.”

“To add, businesses should consider providing more training and professional development for their workforce to bridge the skills gaps, especially since a growing number of them (46 per cent) cite the lack of such provisions to be the main causes of skill shortages in the industry,” he says.

Employee self-improvement

Despite the skills chasm in the recruitment market, employees are demonstrating firm confidence in their abilities. Seven in ten (72 per cent) respondents of the survey believe that their current skills will be in demand by employers five years from now, a slight increase from the 67 per cent in 2018.

“Right across Asia we have noted that employees are confident in the durability of their skillsets, despite the fact that employers have noted shortfalls in a number of areas,” adds Tom.

“While there are more candidates dedicating time outside of working hours to develop their professional skills, most of them (37 per cent) are spending only one to two hours a week doing so. If employees are to warrant their confidence, we feel that they could be doing more to improve themselves.”

Compared with Asia

According to the 2019 Hays Asia Salary Guide, 50 per cent of Asian companies are ‘confident’ and a further five per cent ‘very confident’ that they will be able to recruit talent with the skills they need in the year ahead, a decline on 2018’s figures of 58 and eight per cent, respectively.

Hard skills are sought after over soft skills throughout Asia, with companies from Singapore requiring hard skills the most (65 per cent), followed by Hong Kong (61 per cent), Malaysia (60 per cent) and Japan (59 per cent). Employers in Mainland China are split 50-50 between needing soft and hard skills.

Companies in Mainland China feel they are most likely to find the talent they desire, with 71 per cent answering positively. Optimism also comes from Singapore (59 per cent), Hong Kong (53 per cent) and Malaysia (55 per cent), though these figures are all down from 2018 levels. Japanese organisations are most pessimistic, with 61 per cent saying that they are either ‘not very confident’ or not at all’ confident.

One in ten (12 per cent) employers in Singapore feel that skills shortages will not hamper operations in 2019, while 98 per cent of companies from Japan and 97 per cent from Mainland China expect it to cause disruption.

The area in which skills shortages have made their effects best known is in productivity, base on responses by employers from all five regions. Companies in Malaysia (71 per cent) have seen productivity affected most adversely, with those in Singapore (57 per cent) the least.

Most Asian companies – Mainland China 54 per cent, Malaysia 46 per cent, Japan 44 per cent and Singapore 42 per cent – cite a lack of training and personal development of talent as the primary cause of skills shortages. Hong Kong alone differs from this trend, with 42 per cent of employers seeing competition for roles and job opportunities as the greatest challenge.

More organisations Asia-wide are looking to upskill their current workforce, with 62 per cent making it their tactic of choice for countermanding skills shortages, up from 53 per cent in 2018. Organisations in Mainland China (66 per cent) are most proactive in this area, followed by Malaysia (65 per cent), Japan (64 per cent), Hong Kong (58 per cent) and Singapore (55 per cent).

More employees undertake some form of personal upskilling outside of working hours in 2019 than they did in 2018. Although those in Singapore have the highest percentage of individuals doing no personal development (29 per cent) it is a marked improvement from 2018 (35 per cent).

Employees in Mainland China spend the most time enhancing their skills, with the highest proportion of employees stating that they dedicate ‘six to ten hours’ (15 per cent), ‘ten to 24 hours’ (four per cent) and ‘more than 24 hours a week’ (two per cent). Employees in Singapore (40 per cent), Hong Kong (38 per cent), Malaysia (37 per cent) and Japan (34 per cent) are most likely to do just one to two hours a week of personal development.

Get your copy of the 2019 Hays Asia Salary Guide here or by contacting your local Hays office.

Last updated on April 8th, 2019